First collective agreement at Otelo telecom company

In June 1998, a first framework agreement on employment conditions was signed by trade unions and management at the German telecommunications company Otelo.

On 15 June 1998, after two years of negotiations the telecommunications company Otelo Communications GmbH & Co, the public sector and transport employees' trade union (Gewerkschaft Öffentliche Dienste, Transport und Verkehr, ÖTV) and the chemical, mining and energy employees' union (IG Bergbau Chemie und Energie, IG BCE) agreed the firm's first framework agreement on employment conditions. Otelo is a subsidiary of the VEBA and RWE concerns and currently employs roughly 3,000 employees.

The agreement includes the following provisions:

• a 39-hour working week;

• five extra paid days off per year over the norm;

• full working time "sovereignty" for employees, who may autonomously decide on the beginning and the end of their working days;

• voluntary overtime hours may be exchanged for time off;

• all employees receive a performance-related annual pay bonus;

• 100% continued payment of remuneration in the event of sickness, from the first day of sickness; and

• improved conditions for the reconciliation of family and working life through the extension of part-time working options.

The bargaining parties agreed that they would start negotiations on grading and compensation systems as soon as possible. The resulting collectively agreed regulations will replace the existing individual agreements in the company. Furthermore, the agreement includes an "opening clause" regarding establishment-level regulations on company pensions and the level of the annual bonus.

All parties to the Otelo agreement regard it as a reasonable compromise and a step in the right direction. Werner Bischoff, the official responsible for wages policy at IG BCE, stated that the unions had succeeded in extending the collectively agreed provisions which were formerly valid at the Otelo predecessor, Vebacom. ÖTV wages expert Ralf Zimmermann called the agreement a breakthrough that will have an impact on the whole sector. The agreement is expected to have a positive impact on industrial relations at Otelo and the whole telecommunications sector. Difficulties during the negotiations were caused by the fact that IG BCE organises Vebacom and parts of RWE, and that ÖTV and the metalworkers' trade union, IG Metall, wanted to take part in the talks.